Information TechnologyHOW MOTOROLALOST ITS WAYFor .docx

Information Technology
HOW MOTOROLA
LOST ITS WAY
F
or years, Motorola Inc. had supplied virtually aU the
wii'eless phones to Ameritech Coi'p. But when it
came time to switch to the new digital technology,
sometliing went haywire: Motorola wasn't ready. So in
the summer of 1997, Ameritech rolled out its digital
service using phones from rival Qualcomm Inc., a
S;m Diego upstait. "I could not stop my strategy or my busi-
ness plan and was forced to go witb vendors that were reaily,"
says Mai-c Baniett, Ameritech Cellular's
director of product mai'keting.
An isolated case? If only. Instead,
one of the world's most admired com-
panies, known for cutting-edge technol-
ogy' and gold-plated quality, is coming
up stunningly short these days. The
former trailblazer in two-way radios,
cell phones, pagers, and computer cMps
has missed a digital beat and now finds
itself sci*ambling to catch up. Even then,
its products don't always pass muster
In 1994, Motorola claimed 60% of the
U.S. market in wireless phones, ac-
cording to Hei-schel Shosteck Associates. Today, it has 34%.

The company's wireless-equipment business hasn't fared
any better. In the U. S., Motorola lias lost a-ucial gi-ound to
Lu-
cent Tbchnologies Inc. and Northern Telecom Ltd.—in part be-
cause it has sold faulty products. On top of the problems Mo-
torola has created for itself, a downturn in the semiconductor
and paging industries and tui'moil in Asia haven't helped.
Now, the go-go gi-owth company of a few years ago is
barely inching along. Revenue gi'owtli, which soared an av-
erage 27% a year between 1993 and 1995, has slowed to 5%
in the past two yeare, to $29.8 billion in 1997. Profits have
tumbled, too: down 83% since 1995, to $1.2 billion in 1997,
with a 25% plunge expected this year. As for shareholder re-
tm-n. it has averaged less than 1% annually in tbe past tlu'ee
years, vs. an average 54% in tbe previous three yeai-s. Says
Steven Goldman, a professor at Lebigh University who has
done consulting work for Motorola: "It's bard to imagine
that six or seven yeai-s ago Motorola was one of the most ad-
mired companies in the world. Now, you talk about Nokia and
Ericsson and how they're eating Mo-
torola's luncb."
Even woi-se for Motorola in the long
haul, its hard-earned reputation for
quality is being questioned. The same
rv-p TTiTQ VV1 Y 0 "Fo of o n ^ company that won the
Malcolm
The inside saga
and strategic
blunders

Baldrige Quality Award in 1988 and
once insisted that every executive pre-
sentation begin witb an example of how
to improve quality, now finds itself field-
ing customer complaints. These came
to a head in March, when Motorola lost
a $500 million contract witb wireless
carrier PrimeCo Personal Communica-
tions. Tbe can-ier's beef: Motorola's equipment would some-
times shut down, leaving customers unable to make calls.
Motorola admits to having problems in recent years but in-
sists the future is bright, CEO Christopher B. Galvin de-
clined to comment for this article, but Motorola executives
who report to him say he bas set a hui'dle of 15% to 20% rev-
enue gi-owth and, despite the company's problems, expects to
achieve that vrithin the next year or two. Galvin is betting
tbat the industries tbe company is ¡n will gi'ow 15% a year,
and expansion into new markets will be frosting on the cake.
"We're not very happy with the last few years of business re-
AS MARKET SHARE
HAS ERODED...
SHARE OF U.S. WIRELESS
PHONE MARKET
•94 •95'92 '93
A PERCENT
DATA: HERSCHEL SHOSTECK ASSOCIATES
140 BUSINESS WEEK / MAY 4. 1998

...MOTOROLA S PROFITS
HAVE SLID...
...ANO STOCK RETURNS
HAVE TANKED
•97 '92 '93 ^94 '9
A BILLIONS or DOLLARS
DATA, MOTOROLA
'95 •94 •95 '96 '97
A PERCENT
^ SLOOMBERG FINANCIAL MARKETS
suits," says Merle L. Gilmore, an executive vice-president.
"Just as we have renewed businesses regularly in our histo-
ry. . . we expect to be able to renew oui- business again."
One promising new mai'ket: satellite communications. Mo-
torola's flagbearer there. Iridium, will blast the last two pieces
of a 6{>-satellite constellation into the ski,- on Apr. 30 and
begin
offering new voice and paging services for business travelers
in September. Iridium, 17.7% owned by Motorola, could gen-
erate revenues of $2.6 billion by 2000, says Chase Securities
Inc. "If you throw our product in yoiu- briefcase, you know
you can make a call fi'om anywhere on the planet, and people
can get to you," boasts Indium chief Edward F. Staiano. Mo-
torola has $6.3 billion in Indium contracts and it's developing
satellite expertise that should help win fiiture business.
To be sure. Motorola remains a force to be reckoned with.

Even with its market-share losses and customer complaints,
it's still the world's lai'gest maker of mobile phones and a top
supplier of wireless equipment. It's a leafHng maker of digital
phones overseas. And it remains the most sought-after brand
name in mobile phones. Almost every carrier that criticizes
the company for its late products says it does so because it
wants them so badly. "We need them back in the game." says
Dennis E. Strigl. CEO of Bell Atlantic Mobile.
But time is crucial. Galvin, 48, the grandson of Motorola's
founder, is working furiously to stem market-share losses
and return the company to its roots as a creator of top-
notch products. Since taking over 16 months ago, he has re-
placed the heads of the wireless-phone and -equipment busi-
nesses and has installed top lieutenants in key posts
throughout the company.
Galvin also has railed against a culture that he thinks, at
tbnes, has been too smug, too engineering driven, and too fo-
cused on internal rivalries. To foster cooperation among di-
visions, he's starting to pay top execs based on companywide
performance—not just their own division's results. At the
same time. Galvin has insisted that sales reps better serve
customers. Already Motorola is working closely with AT&T
Wireless Services to develop an innovative digital phone.
"They're bending over backward for us," says an AT&T exec-
utive. "That's never happened before."
"WARRING TRIBES." The most dramatic change is expected
later this spring, when Galvin will restructure the company for
the second time in his short tenure. His aim: to consolidate op-
erations into three major groups, including a communications
division that wilt pull together mobile phones, wireless equip-
ment, two-way radios, pagers, and cable modems. Tliis will en-
courage the communications teams to coordinate business
plans, share ideas, and cut down on development costs.

This also could go a long way toward cui-bing Motorola's cul-
ture of "waning tribes." In recent years, division heads had al-
most total control of their operations, which meant they could
compete or simply refuse to cooperate with other divisions.
That cultui'e worked well at times, especially when the cellulai"
operations cannibalized Motorola's own two-way radio busi-
ness and became a much bigger business. But recently, internal
fiefdoms left Motorola's diisions badly out of step. The semi-
conductor gi-oup wouldn't make chips other divisions wanted to
use. And the wireless-equipment gi*oup sold customers digital
geai- two years ago—while the wireless-phone unit is just now
coming out with digital phones for those systems.
Motorola's History IT HIT THE PINNACLE OF SUCCESS
ONU TO FOLLOW ITWITH MANAGEMENT MISSTEPS AND
ILL TIMED STRATEGIES
Galvin and his brother Joseph
Galvin found Galvin Manufac-
turing in Chicago.
portable FM
two-way
radio, a
backpack
walkie-talkie
that's the
predecessor
of today's
cellular
AN EARLY r-
WALKIE- ^
TALKIE
'A GALVIN

the first
phones. The
company goes
public.
its first pagers—a
business Motorola
comes to domi-
nate with 85%
market share.
• V^>£l Unveils its first
microprocessor, the 6800. By
1997, Motorola's computer
chip business grows to $8
billion in sa les^21% of the
company's revenues.
years and $200
million in devel-
opment,
the com-
pany's
first cellu-
lar tele-
phone net-
AN EARLY
EIGHTIES
PORTABLE
work begins commercial
operation.

f ^ L M The company's nine-
year push to emphasize qual-
ity products culminates when
it receives the Malcolm
Baldrige
National
Quality
Award from
Congress.
George
Fisher suc-
ceeds Robert
Galvin as
chief execu-
tive officer,
the first non-Galvin to head
the company.
l ^ i ^ l ' l Motorola discontinues
development of wireless
infrastructure based on a
standard called TDMA in
favor of an alternative,
CDMA, which is supposed
to have higher capacity to
carry phone calls. Today, the
lack of TDMA equipment
means Motorola can't supply
25% of the digital U.S. wire
less infrastructure market.

I H ^ I ' l G T E . Southwestern
Bell, BellSouth, and Metro
One drop Motorola because
of poor switching capabilitie
in its wireless equipment.
I^I:>:1 Gary Tooker takes
over as CEO after Fisher
leaves for Eastman Kodak.
CHAIRMAN TOOKER
142 BUSINESS WEEK / MAY 4, 1998
Hopes are high that these efforts will
put the company back on track. To head
the new communications division, Galvin
has tapped Gilmore, a long-time confi-
dant who had heen i-unning the compa-
ny's operations in Euj"ope, Africa, and
the Middle East. "The most important
objective," says Gilmore, "is that the
organization will he able to serve the
customer better."
But will it? Motorola has a good shot
at recovering if Galvin is willing to
make hokl moves. Top of the list: He
needs to decide whether to sell the com-
[jany's stmggling wireless-equipment business or huy a tele-
com-switch maker to holster it. More important, he must
take the starch out of Motorola's culture so its executives get
back to listening to customers—instead of dictating to them.
JARRING PICTURE. So how did the once mighty Motorola lose

its way? How could a company once dubbed the "American
Samui'ai" for blazing a trail overseas, ftnd itself being beaten
to the punch by European giants and outfoxed by U.S.
startups? Intemews with cuirent and former Motorola ex-
ecutives, customers, rivals, and analysts paint a jarring picture
of the company's fall from grace.
Motorola's tale is a cautionaiy one. It's a lesson in how a
company reaches the pinnacle of its industry—and becomes
blinded by its own success. It was hubris, say insiders, that
kept executives from recognizing better technologies, chang-
ing markets, and customei^' needs. What followed were man-
The company's
semiconductor
group wouldn't
make chips other
divisions needed
agement missteps, ill-timed strategies,
and spotty execution.
It began in the heady days of 1995.
At the helm of the company sat Gaiy
L. Tooker, a personable if not charis-
matic executive who had started work-
ing in Motorola's semiconductor opera-
tion 33 years earlier. He hail replaced
the much praised George M. C. Fisher,
who had left to head Eastman Kodak
Co. in 1993. At the time, Robert L.
Galvin. the son of the founder anil the
company's chief for 27 years, polled the
board to find out if they would name his

son, Chris, then a senior executive vice-president, as CEO.
Board members balked. They thought the younger Galvin,
then 43, was too gi-een. He had started out at Motorola in
1973 selling two-way radios and had headed several key
businesses, including the paging division. But .some executives
still considered him a lightweight, in part because he did
not have an engi-
neering degi-ee
like most of the
other top brass.
Still, it was a matter of when Galvin would become CEO,
not if. "Inside, people knew it was a monarchy," says one for-
mer senior executive.
Tooker, by contrast, was an engineer who had helped Mo-
torola prosper lai'gely by giving division heads free rein to
run their own show. The company owned the wireless-phone
Information Technolog;
i n Motorola raises $800
nillion for the Iridium satél-
ite system, which promises
0 supply communications to
îvery part of the world.
l:yM Motorola and
slorthern Telecom discontin-
their joint venture for
vireless equipment. Lack of
1 strong switch partner
lurts Motorola's ability to
Jellver end-to-end wireless
ietworks.

E U Top execs decide
igainst buying General
nstrument, a leader in cable
"V set-top boxes. Tooker and
)thers think Motorola's
îxpertise is in wireless com-
nunications—not cable
nfrastructure. The decision
eeps Motorola from wrap-
)ing its cable modem
ixpertise into Gl's set-top
joxes.
l^i^ Execs decide not
0 buy CDMA chip from
iualcomm because of
I/hat it considers
xorbitant costs.
Christopher
QUALCOMM CHIP
Developing CDMA chip
internally slows intro-
duction of Motorola
phones.
i--lii,'.!.'J^:#gTrni Discontin-
ues production of its Marco
and Envoy handheld comput-
ers, which
are design
marvels but

commercial
flops.
MOTOROLA
ENVOY
Introduces the Star-
TAC, Motorola's
smallest cellular
phone. Motorola's
decision to limit distri-
bution to carriers that
buy most of their
phones from the compa-
ny infuriates customers.
STARTAC CELLULAR PHONE
Galvin, grandson of the
founder, becomes CEO.
CHRfS GALVIN
Apple
Computer interim CEO Steve
Jobs pulls the plug on
licensing the Macintosh to
cloners. Motorola, which
developed the PowerPC chip
used in the Mac
and had
launched a

Mac-clone
business,
has to fold
its clone
operation. JOSS
Because its
network shut down for up to
two hours, wireless carrier
PrimeCo replaces Motorola
with Lucent Technologies as
the supplier of wireless infra-
structure for a $500 million
contract.
PRIMECO
: O MMUNICk 1 IONS
APRIL 7,1998 First-quar-
ter earnings plummet to half
those of a year ago, and
Motorola warns that profits
will remain below forecasts
for several quarters. The
stock plunges 1 1 % .
Galvin plans to
announce a restructuring
into three major groups:
communications, semicon-
ductors, and components.
The goal is to better coordi-
nate the R&D and marketing
in the divisions making con-
sumer products such as cel-
lular phones and pagers.

BUSINESS WEEK / MAY 4, 1998 143
Infonnation Technology
business: Its share of the U. S. market had increased to 60%
in 1994—Nokia Corp. and L. M. Ericsson were barely a blip
on the wireless scene. In January. 1995- Motorola announced
results for 1994 that brought Wall Street to its feet: Revenues
were up 31%, to $22.2 billion, and pi-ofits soared 53%, to
$1.6 billion.
But this also was the year that U.S. wireless caniers be-
gan waking up to digital technology. The digital era promised
new services like CaJler I. D., paging, and short messaging.
The carriers were hooked.
Not so Motorola. In one telling
meeting in î'ebruary, 1995, top execs The celiular phoiie
ft'om Ameritech met with Motorola's chief clunfí tO analog
brass at the cellular industry's big ,. ^.,
trade show in New Orleans. "I need COStmg the company
[digital! handsets... in a year," Bai-- preciouS time
nett recalls saying. Motorola's cellular-
phone chief, Robert N. Weisshappel, wasn't there, but Ms sec-
ond-in-command did her best to reassui-e Bai-nett. "We want
to meet your goals," said Suzette Steiger, according to Bai--
nett. "Let me take it under review." AT&T, Bell Atlantic, and
others were delivering the same message.
But inside Motoi-ola, it was falling on deaf eai-s. Weisshappe!,
a bespectacled fonner engineer, had spent 24 yeai's at Mo-
torola and desei-ved much of the ci-edit for making its cellulai-
phone bushiess dominant. Known for his explosive temper, liL';

greatest skill was in designing ever smaller stylish phones.
In li)95, he believed that what most consumei-s wanted was
a better analog
phone, not a dig-
ital phone that
would have to be
big and bulky because the technology was so new. "Forty-
three million analog customers can't be wrong," lie told a
small gathering of execs at the cellulai- gi'oup's headquaiters
in suburban Chicago, according to one former employee. "It
was hard to get him to stop talking about [analog]," recalls
one executive. "The rank and file were scared to death."
But Weisshappel had what he thought was an ace up his
sleeve. In Jamiai-j', 19%, Motorola introduced the ultrasleek
StaiTAt' phone. The phone had taken two years and millions
of dollars to develop—and it was a design mai-vel, smaller
than a cigarette pack. "Motorola has
taken what was never thought possi-
ble and made it a reality," Weisshap-
pel crowed at the time.
Sui-e, the StatTAC wasn't digital, but
Weisshappel thought he could use his
design breakthrough to hold back the
tide of technology. In the summer of
1996, he and his top execs introduced
the so-called Signatm-e pi-ogram. The
idea was simple: Motorola would dis-
tribute the StaiTAC only to canners
that had bought a high percentage, "
t>'pically 75%, of their mobile phones from Motorola'—and
agi'eed to promote the phones' featui'es in stand-alone dis-
plays. The goal was to boost maj-gins with higher-priced prod-

ucts such as the $1,500 StarTAC and, at the same time, protect
Motorola's market shai'e.
The Signature program turned into a fiasco. In one meet-
ing in Bell Atlantic Mobile's executive conference room at its
Bedminster (N.J.) headquarters, Weisshappel and his team
laid out the requirements for the carrier's executives with
what Bell Atlantic Corp. says was a "you-must" attitude.
The can-ier's Strigl quickly became ftmous. "Do you mean to
tell me that [ii' we don't agi-ee to the progi-am] you don't want
to sell the StarTAc in Manhattan?" he recalls teUing Weiss-
happel. Weisshappel declined comment on the incident. Bell
Customers started
complaining
Motorola's system
sometimes shut down
Atlantic wasn't the only company to take exception. CTE
Corp. and BellSouth Corp. reñised to participate in the pro-
gram, and sales to both carriers dropped.
The company's digital delays weren't caused only by Weiss-
happel's preoccupation with Starâ AC. Motorola tried buying
semiconductors from rival Qualcomm to get into the digital
game faster. But Weisshappe! felt Qualcomm's prices were ex-
cessive, and he stopped buying in 1995 to develop the chips
intei-nally. As it turned out, the development took two years,
cost millions of dollars, and lost the company precious time.
TENSE MEETING. Meanwhile, customei-s were launching
(iigital
sei''ice—without Motorola phones. In Febniary, 1997, two
yeai-s after he had fii'st asked for digital phones, Ameritech's
Barnett met again with Steiger. "We're placing orders now,"
he told her. "Do you have phones?" She didn't. Ameritech re-

luctantly tuiTied to Qualcomm.
By eai'ly 1997, newly minted CEO Chris Galvin had had
enough. Rivals Nokia and Qualcomm were putting a painful
dent in Motorola's mai-ket shai-e. In a tense meeting at Mo-
torola's headquarters, Galvin demanded to know why the mo-
bile-phone group hadn't I'eleased key digital phones. Weiss-
happel had heard all this before and was tired of the
badgering. "I guess I'll just buy Qualcomm." he joked,
according to one person at the meeting. Weisshappel left the
company the follovring August.
By that time. Motorola had long ago
made the decision to make digital
phones. But it wasn't that simple. Ttiere
were three competing digital standards
to choose from bi the U. S. Code Divi-
sion Multiple Access ((.-DMA) technology
offers sL times the capacity of analog
.systems—and is now the most popu-
lar, with 5()% of the U. S. mai'ket. Time
Di'ision Multiple Access (TDMA), which
has three times the capacity, accounts
for one-quail-er of today's market. And
Global Standard for Mobile Communi-
cations (GSM), the thii-d standard with two to thî ee times the
ca-
pacity, claims 25% of the U. S. market and is the technology of
choice in Europe.
Motorola developed its csM phones first and has become a
big supjjlier overseas, as well as in that segment of the II. S.
mai-ket. But it has been slow to develop phones for the oth-
er two U. S. standards. "We underestimated the engineering
effort to bring these products to market," says James P.

Caile, coipoi-ate vice-president for mai-keting in Motorola's
mo-
bile-phone gi-oup. "It's an emban-assment to us."
By all accounts. Motorola's wii-eless-equipment gi-oup should
be red-faced, too. In 1995, executives had been aggressively
developing digital products, but they put all their chips on
just one standai-d in the U. S.—CDMA. AS it turned out, that
Information Technology
eliminated Motorola fi-om 50% of the U. S. market. The irony,
say foi'mer executives, is the company had been developing
TDMA equipment but abandoned it to focus on CDMA. "We
were way ahead of eveiybody," laments one engineer who
worked at the company during that period. Motorola says it
dropped TDMA because it didn't think it had strong enough re-
lationships with TDMA caniers to land deals.
Still, Motorola did have some big CDMA wins. In September,
1995, Primeco
tapped the com-
pany to help
^^^^^^^—^-'^^^^^^^^^^^^— build its national
network. And Motorola would go on to nab $5 bilhon in
equipment contracts in 1997.
While Motorola was scrapping for contracts, it had to
protect what has been the Acbilles' heel of its wireless-
equipment business: its lack of a telecom switch. A switch, a
type of computer, is particuUuiy important in digital net-

works, which need much more intelligence than the old ana-
log systems. It's the
switch that makes the
snazzy new services
possible. Motorola has
established itself as the
king of base stations,
which send and receive
sound over radio fre-
quencies to mobile
phones, but it doesn't
make switches. Tradi-
tional telephone-compa-
ny suppliers, such as
Lucent and Northern
Telecom, make both
pieces so tbey can offer
customers no-fuss inte-
gi'ated networks.
By 1995, the compa-
ny had been trying for
more than a decade to
get a strong switch
How Motorola Missed the Mark
casionally stop working— t̂ he lapses lasted between 30 minutes
and two hours. PrimeCo traced the problem back to Mo-
torola and, aftei- Motorola tried in vain for several months to
repaii- it. PrimeCo decided to bring in Lucent.
PRICE WARS. AirTouch Communications Inc., which owns
half of PiimeCo, also has been experiencing a high number of
dropped calls in its Los Angeles market, where it uses Mo-
torola equipment. An AirTouch spokesperson declined to
comment on whether Motorola would remain an equipment

supplier. The stumble in digital has taken its toll: Motorola's
share of the U. S. digital equipment market was Vd^e last
yeai-, vs. Lucent's 38% share, says the Yankee Group.
Not all of Motorola's problems are of its own making. De-
spite a huge share of the pager and paging-equipment mar-
kets, price wars have left paging companies without the
money to buy products. Revenues in the Motorola group
that includes paging dropped 4% in 1997, to $3.8 billion. The
problems at Apple Computer have devastated Motorola's
computer-chip business, so it is pushing harder on specialized
chips for airbags and
CUSTOMER
PRIMECO
PERSONAL
COMMUNICATIONS
BELL
ATLANTIC
AMERITECH
U.S. CELLULAR
a
partner. In 1984, it
signed an agreement
with DSC Communica-
tions Corp. in Piano,
Tex., for the two com-
panies to mai'ket their
equipment together.
But in 1990, Motorola

got dumped foi" poor switching capabilities by four key cus-
tomers—CTF,, Southwestern Bell, BellSouth, and Metro One
Communications. In 1992, Motorola instead formed an al-
liance with Canada's Northern Telecom—but the partner-
ship fell apart two years later when the competitors couldn't
put aside their differences. The company again turned to
DSC and at times Siemens and Alcatel AJsthom.
But problems continued. In early 1996, Bell Atlantic was
getting more concerned about cellulai- fi-aud and asked its two
equipment providers, Lucent and Motorola, to come up with
solutions. Lucent provided a product within three months. In
part because of switching problems, it took Motorola more
than a year—and Bell Atlantic is still not satisfied. Strigl re-
placed Motorola with Lucent as his equipment provider in
Connecticut. "We were veiy concerned that we were getting
sucb fast response from Lucent and we were getting promis-
es but no action from Motorola," he says. "I couldn't take
them at theii" word anymore."
It got worse. In late 1996, PrimeCo started getting com-
plaints from customers because Motorola's system would oc-
PROBLEM
Equipment problems in 1997-98 result in its network
shutting down for up two hours. PrimeCo
drops Motorola's equipment in favor of Lucent's gear.
In early 1996, the carrier asked both Lucent and
Motorola for equipment to help prevent fraud. Lucent pro-
vided the technology within three months. Motorola took a
year—and Bell Atlantic still isn't completely satisfied with
its product.
In 1995, the Baby Bell told Motorola, which supplied most of

its wireless phones, that it wanted to move to digital equip-
ment. When Ameritech launched ifs digital network in
spring 1997, Motorola still didn't have products ready.
Ameritech turned to other suppliers, including Qualcomm
and Sony.
other products.
The Asia turmoil also
has contributed to Mo-
torola's woes. In 1995,
Motorola was beginning
to reap substantial ben-
efits from its two-
decade pusb overseas,
paiticulai'ly in Asia. The
company dominated the
Asian market for two-
way radios and pagers.
It was running neck-
and-neck with Ericsson
for leadership of the
mobile phone market
and, after battering its
way into Japan's pro-
tected telecom market,
it held close to a quar-
ter of the mobile-phone
market.
But trouble lay
ahead. The 200 engi-
neers at Motorola's
headquartei-s wbo were
focused on the Japan-
ese market were wed-

ded to analog prod-
ucts—despite protests from Motorola's executives in Japan.
"Motorola could be revered today if only it bad embraced dig-
ital," says a foi-mer Motorola executive wbo was in Japan at
the time. Motorola was late witb digital phones and, in the
past thi*ee years, has seen its market share slide to 3%. The
recent econoniic downturn in the region also has hml demand.
Questions about the company's future remain. Can it catch
up in digital phones? Will it sell off its wireless equipment
busi-
ness? Can Galvin fix its cultui-e, a task of no small magnitude?
Despite its problems, a sense of optimism is creeping
through the company's headquaiters. Galvin is telling execu-
tives that Motorola must strive for "renewal"—completely
new businesses in which the company can recreate itself.
After all, Motorola got its name because founder Paul V.
Galvin developed a mai'ket in car radios, and then the com-
pany abandoned it as cellular service was taking off.
Now we'll see if Chris Galvin can truly follow in his gi-and-
father's footsteps.
By Roger O. Crockett m Chicago, with Peter Elstrom in
New York
The carrier is forced to test four batches of Motorola's digital
wireless phones over a six-month span before they finally
work. Meanwhile, similar phones—all used in its Tulsa
(Okla.) market—have been supplied by rival Nokia for two
years. U.S. Cellular still can't get digital phones from Motoro-
la for its Knoxville (Tenn.) and Yakima (Wash.) markets.

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